Treasurer retaliates after FBT criticism

Updated
July 18, 2013 09:17:00

The Coalition has accused the Government of dumping more hardship on the car industry when it's already in a fragile state to pay for fast-tracking the emissions trading scheme by tightening fringe benefits tax rules for cars. But the Treasurer Chris Bowen says all the Government is doing is bringing the tax concessions into line with other parts of the tax system.

TONY EASTLEY: The Federal Treasurer has hit back at Opposition claims that its overhaul of the fringe benefits tax (FBT) on cars will devastate the auto industry.

The Government has announced plans to make it more difficult for people to claim business tax concessions on car use.

Lexi Metherell has been speaking to the Treasurer, Chris Bowen.

LEXI METHERELL: Treasurer, Holden says the changes you're making to the fringe benefits tax will have a significant impact on its business. What do you say to that?

CHRIS BOWEN: Well, I think it's very important that we're very clear about what these changes are. We have not abolished the FBT concession for business use, despite some of the rhetoric I've seen in the political debate over the last day or so. That is far from the case.

All we have done is applied similar rules that apply elsewhere in the tax system. It doesn't affect people, tradies who already use their log books. This affects people who are claiming an upfront deduction for business use and we are just asking them to show us some evidence of that business use.

LEXI METHERELL: Then Treasurer, if it's not such a big deal, why didn't you consult with the industry before imposing this change?

CHRIS BOWEN: Well this is a matter of the integrity of the tax system and ensuring that we are using modern technology, that we're responding to the times and responding to the fiscal circumstances in saying well if you're claiming business use for a car, it's well understood and accepted across the tax system that there's a need to back that up with some evidence.

LEXI METHERELL: So you do think there is some rorting going on?

CHRIS BOWEN: Well, I wouldn't use the term rorting. What I would say is that people are making claims for business use, that's legitimate under the current circumstances. We are saying it's legitimate to have some evidence of that going forward.

LEXI METHERELL: Your opposition counterpart, Joe Hockey, has called on you to immediately release all the data to prove that people are using this fringe benefits tax incorrectly. Will you?

CHRIS BOWEN: Well, here's Mr Hockey's position. He beats his chest and huffs and puffs about surpluses and tough decisions. Is he really suggesting that $2 billion worth of expenditure over the next four years, $1.8 billion worth of tax expected over the next four years, which is what Treasury estimates can be saved by ensuring proper record keeping, is not an appropriate thing to do?

Now I've released the relevant Treasury estimates of the revenue impacts and I'm more than happy to provide further updates to correct the myths that Mr Hockey and others are peddling.